Creative billing strategies across the globe.

• Author: Moore, Janet H.

Clients are scrutinizing their legal bills--and are increasingly dissatisfied with traditional hourly billing. "Hourly rates on their own are outdated and can be viewed as rewarding slow working practices," says Jonathan Mortimer, head of dispute resolution of Langleys Solicitors in York, England.

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So, what kinds of creative billing strategies are lawyers using to keep clients satisfied--and build client trust? After all, according to Silvia Hodges, who teaches professional services marketing at Emerson College, "What really counts is that the client believes the firm has his or her best interests in mind." Here are some ways to do that.

Contingent Fees and Third-Party Funding

Although only specific jurisdictions (such as the United States and some parts of Canada) permit some variation on contingent fee arrangements, such arrangements are increasingly popular in the United States--in large part because clients pay only upon a successful result. Even the mainstream media is taking note of contingent fee popularity; for example, last year "Fast Company" published an article ("Caffeinated, Aggressive & Brash, Esq.") celebrating the contingent fee success of Los Angeles-based Quinn Emanuel Urquhart Oliver & Hedges.

Despite the attractive features of contingent fee arrangements, some clients hesitate to accept them. Barry Barnett, a partner at Susman Godfrey LLP and author of Blawgletter, explains that clients often worry about how to negotiate contingent fee arrangements, or fear losing control over how the case proceeds. And some clients simply dislike giving their lawyer s "an entrepreneurial interest in litigation," concludes Barnett.

In England, litigants commonly resort to insurance because "the fees and cost risks normally inherent in commercial disputes are much more manageable," notes Paul Jonson in Pannone LLP's Manchester, England, office. In his firm's contingent cases, clients pay reduced hourly rates, and the firm receives the balance of its fees from the recovery (if the case is successful) or from insurance (up to a limit). Third-party litigation funding has gained popularity not only in the United Kingdom but also in Australia, Austria, Germany and certain other jurisdictions. Although usually designed so that the client, not the lawyer, deals directly with the funder, critics say that lawyers end up serving two masters--the client and the funder.

Sharing Risk of Future Income Streams

Even transactional...